The third-generation Mustang is a pony car manufactured and marketed by Ford from 1979–1993, using the company's Fox platform and colloquially called the Fox body Mustang. During its third generation, the Mustang evolved through several sub-models, trim levels, and drivetrain combinations during its production and seemed destined for replacement with a front-wheel drive Mazda platform. Company executives were swayed by consumer opinion and the rear-wheel drive Mustang stayed in production, while the front-wheel drive version was renamed the Ford Probe. Production ended with the introduction of the fourth-generation Mustang (SN-95) for the 1994 model year.

The 1979 model year Mustang used the Fox platform intended by Ford as "a one-size-fits-all [platform] to serve as a two-door sports car and a four-door family car," initially used with the Ford Fairmont and Mercury Zephyr twins that debuted in for model year 1978. "Ford built the 1979 Mustang around a platform it would share with more humble cars in the Lincoln-Mercury-Ford corporate family in order to keep development and construction costs down." Body styles for the Mustang included a 2-door sedan (coupe) and 3-door sedan (hatchback). Two trim levels were available: the base model and the more luxurious Ghia model. The wheelbase was 5 in (127 mm) shorter than the Fairmont/Zephyr series at 100.5 in (2,553 mm) (nearly the same as the outgoing European Ford Capri and over 4 in (102 mm) longer than the Mustang II).

The Cobra appearance package also made its debut in 1979 and would continue through both the 1980 and 1981 model years. The 1979 Cobra (17,579 produced) featured a black grille, trim, and moldings (except the sail panels that were painted body color), as well as black lower body paint. The door handles, door locks, antenna, and roof drip rail were bright. Color-coordinated dual pinstripes in the wraparound body-side moldings and bumpers, as well as COBRA decals on the doors, were standard. All 1979 Cobras came equipped with a small, center mount non-functional hood scoop (to provide clearance for the air cleaner due to the 2.3 L Turbo extra height). The Cobra hood decal was optional for 1979. Rear spoilers were not included on the 1979 models, as they made their debut on the mid-year introduction of the Indianapolis 500 Pace Car replica. The 1980 Cobra (5,550 produced) and the 1981 Cobra (1,821 produced) received a new front bumper and air dam with fog lights, non-functional cowl-type hood scoop, and rear spoiler (all carried over from the earlier Pace Car replicas). Graphics included belt-line stripes, a redesigned hood decal, and "COBRA" decals on both the side quarter windows and the rear spoiler. The exterior trim on both the 1980 and 1981 Cobras was black, including the door handles, key locks, antenna, and sail panels.

Interior Cobra-specific parts on all 1979–1981 Cobras included "Engine Turned" dash bezels and three COBRA emblems — one in each door panel and one on the passenger side dash bezel.

Drivetrains in the 1979 model year consisted of the 140 cu in (2.3 L) four-cylinder Turbo engine, rated at 131 hp (98 kW; 133 PS), with a Borg-Warner four-speed manual transmission or the small block 302 cu in (4.9 L) V8 (marketed as 5.0 L), rated at 139 hp (104 kW; 141 PS), with a four-speed manual overdrive transmission or a three-speed automatic transmission. For the 1980 model year only, the 2.3 L four-cylinder Turbo engine was available with an optional three-speed automatic transmission. However, the four-speed manual was still standard. The 302 small block V8 was replaced with a 4.2 L (255 cu in) V8, rated at 118 hp (88 kW; 120 PS), with a three-speed automatic transmission. For the 1981 model year, the powertrains list was expanded to include a naturally aspirated 2.3 L engine and a 3.3 L (200 cu in) I6 engine. The 2.3 L Turbo engine was only available in Canada, the automatic transmission was no longer optional, and the four-speed manual transmission was replaced by an overdrive five-speed manual transmission made by Tremec (model VS140). The 4.2 L V8 also remained optional in 1981, rated this time at 120 hp (89 kW; 122 PS).

The Ford Mustang was chosen as the Official Pace Car of the 1979 Indianapolis 500. Ford commemorated this event with a mid-year "Indy 500" Pace Car version (10,479 produced). All were finished in two-tone pewter and black with orange and red graphics. The front end featured a unique front air dam with fog lights, and a full-length cowl-type hood scoop, while the rear was available with a new for 1979 rear spoiler (all of these additions carried over to both the 1980 and 1981 Cobra). The black interior featured Recaro seats with patterned black and white inserts. Available were the 2.3 L (140 cu in) four-cylinder Turbo with a four-speed manual transmission or the 302 cu in (4.9 L) V8 with either a four-speed manual overdrive or three-speed automatic transmission. The production cars included a sunroof. However, the three actual pace cars were fitted with a T-top by Cars & Concepts of Brighton, MI. The removable panel roof option would not become an available option until the 1981 model year.

For 1982, the Cobra model was dropped in favor of the Mustang GT, which returned after 13 years. This would garner the slogan, "The Boss is Back!" This new GT model featured a re-engineered 157 hp (117 kW; 159 PS) High Output Windsor 302 cu in (4.9 L) engine with new valves, a more aggressive cam (from a 1973 351W Torino application), a larger two-barrel carburetor, a revised firing order, and a better breathing intake and exhaust system. The Tremec "SROD" four-speed manual override was the standard, and the only available, transmission behind the 302 (4.9 L) in 1982. The dual-snorkel air cleaner was emblazoned with "5.0 Liter H.O." lettering. The GT included the front air dam with fog lamps and the rear spoiler from the 1979 Pace Car and the 1980 and 1981 Cobras. However, the full-length hood scoop from those models did not carry over and the smaller 1979 Cobra hood scoop made its return on the GT. Four colors were offered on the GT model, and they consisted of black, bright red (mid-year introduction), dark red, and silver. The 302 cu in (4.9 L) was available on lower-trim models; L, GL, and GLX. It also formed the basis for the "SSP" (Special Service Package) cars that were used by government as well as police/law enforcement and were almost exclusively ordered in the 2-door sedan body style. If an automatic transmission was ordered in the 1982 GT, the 302 (4.9 L) was replaced with the 255 (4.2 L), which was carried over from 1981. The automatic transmission was a Ford C5, which replaced the Ford C4 in 1981. The hood scoop was optional, at an extra cost, on the 1982 GT with the 4.2 L engine and C5 automatic. The carbureted, Turbocharged 2.3 L engine was also available in the 1982 GT, but only in the Canada market.

Engines for the 1979–1982 models included the 88 hp (66 kW) 2.3 L Pinto inline-four, 109 hp (81 kW) 2.8 L Cologne V6 (made by Ford of Germany), and the 140 hp (104 kW) Ford small block engine back in 1982 with the moniker of 5.0 L and with its front fenders badged as such. All were carried over from the Mustang II line. Shortly after the model year started an 89 hp (66 kW) 3.3 L straight-six engine was available. Supplies of the 2.8 L V6 proved inadequate leading to it being discontinued in late 1979. A new 132 hp (98 kW) 2.3 L turbo four-cylinder, debuted that offered similar horsepower to the V8. The 2.3 and 2.3 L turbo, as well as the V8 models, could also be optioned with the newly developed TRX handling suspension that included Michelin 390 mm tires and accompanying metric-sized wheels.